BTCCNY Price Technical Analysis: Watch Out for a Triangle Break!

BTCCNY has been consolidating recently as investors are wary of additional regulations from Chinese authorities. Price has formed lower highs and found support around 6200.00, creating a descending triangle visible on the 1-hour time frame. Price is currently testing the triangle resistance and could be due for a move back to support.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In other words, an upside breakout could be more likely to take place than a downside one. In addition, the 200 SMA lines up with the triangle support, adding to its strength as a floor.

RSI is turning higher to show that buyers are taking control of BTCCNY price action. Similarly, stochastic is heading north so bitcoin could follow suit. In terms of fundamentals, however, the story is different.

Latest reports indicated that several exchanges decided to impose higher fees on bitcoin trading after a recent round of investigations done by the Chinese central bank. Prior to this, the largest bitcoin platforms announced that they would no longer be offering margin accounts on bitcoin since these magnify the risks involved in trading a very volatile asset. The Chinese central bank has also mentioned that they found several violations so traders are anxious about additional measures or penalties.

These investigations by Chinese authorities are being conducted with the aim of curbing offshore investment, thereby keeping funds in the domestic economy. Officials also want to curtail speculative activity on the yuan while they attempt to keep the currency weak in order to retain trade advantage.

This currency manipulation tactic has already been called out by US President Trump so market watchers are also waiting to find out if any punitive measures will be imposed, especially since the administration has plans to work with the IMF, G20, and G7 to investigate forex manipulation practices. If these bear fruit and force China to stop its actions, yuan could be in for a sharp rally against bitcoin.

BTCC CEO and cofounder Bobby Lee even admitted that bitcoin exchanges could be under regulation by the Chinese government at some point, claiming that it was inevitable and it was just a matter of when. This could keep a lid on bitcoin activity and price gains as liquidity remains subdued.

“The answer is, I don’t know when it will happen but I know it will happen. I have confidence of that because fundamentally I think bitcoin exchanges need to be regulated,” Lee told Business Insider. BTCC is also one of China’s largest bitcoin exchanges.

Keep in mind that China is the largest bitcoin market so any change in activity in this country could have a strong and lasting impact on the cryptocurrency’s price action.

“Bitcoin regulation may not have been on their agenda for 2017, but given the price spike in early January, it became an emergency topic,” Lee added. “They’ve seen the price go up a lot. They want to make sure the price doesn’t go crazy, create a bubble, and hurt a lot of investors. They’re a little bit unhappy with how the price goes up too much so they’ve been giving us some scrutiny.”

With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.

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